Using Cost Information in Cost and Operational Effectiveness Analyses: Some Lessons Learned

This paper identifies and discusses certain issues that appear to be common to all Cost and Operational Effectiveness Analyses (COEAs). It draws from CNA's collective experience in conducting COEA-like studies as well as from longer standing principles of defense systems analysis. Each issue relates in some way to the role of cost information in the analysis. Yet at the same time, each is considerably broader than what is typically thought of as cost estimating or cost analysis. We begin with the role of COEAs in the acquisition process and a general discussion of the objectives of COEA studies and how they are put together. We then focus on the following issues: system versus decision alternatives; integrating cost and effectiveness results; wartime costs; discounting; risk and uncertainty analysis; and affordability.